»Ê¹ÚÌåÓýapp

CTA10/S269DC(16)-(22)

»Ê¹ÚÌåÓýapp calculation of the used amount in respect of a non-banking or pre 2016 non trading loss on intangibles is prescribed in the banking surcharge legislation (paras (16) â€� (22) S269DC).

»Ê¹ÚÌåÓýapp following example shows how to do the used amount calculation over a number of accounting periods with variable levels of non-trading debits and non-trading credits.

Accounting period ended 31 December 2018

• Company C becomes a banking company
• At 31 December 2017 it has a carried forward non-trading loss on intangibles of £600m.
• In the accounting period ended 31 December 2018 it has non-trading debits of £70m and non-trading credits of £50m.

»Ê¹ÚÌåÓýapp ‘relevant accounting periodâ€� is 31/12/17 (para (17)) and Company C has a non-trading loss on intangibles at that date which is carried forward to the accounting period ended 31 December 2018 (para (16)).

»Ê¹ÚÌåÓýapp ‘initially carried forward debitâ€� is £600m (para (18)).

»Ê¹ÚÌåÓýappre is a ‘used amount ‘in the accounting period ended 31 December 2018 because (a) the £600m exceeds the aggregate of used amounts (0) and (b) there are non-trading credits of £50m. NB. »Ê¹ÚÌåÓýapp initially carried forward amount will always exceed the aggregate of used amounts until the £600m has been fully used.

»Ê¹ÚÌåÓýapp ‘used amountâ€� is calculated by reference to paras (20) and (21) and the first step is to determine ‘the remaining carried forward amountâ€�. This is the excess in para (18)(a) that is the amount by which the initially carried forward amount exceeds the used amounts for that particular accounting period.

»Ê¹ÚÌåÓýapp ‘remaining carried forward amountâ€� is £600m and this is greater than the total of para (20)(a) non- trading credits â€� £50m and (b) non-trading losses set off against other profits â€� £0. »Ê¹ÚÌåÓýapprefore the used amount is equal to the total of (a) and (b) = £50m. This is the figure to be used in calculating the total non-banking or pre 2016 reliefs.

Acounting period ended 31 December 2019

• Company C has aggregate used amounts of £50m
• Company C has non-trading debits of £80m and no non-trading credits

»Ê¹ÚÌåÓýappre is no ‘used amount ‘in the accounting period ended 31 December 2019 because although para 18(a) the £600m exceeds the aggregate of used amounts (£50m) (b) there are no non-trading credits or non-trading losses set off against other profits.

Accounting period ended 31 December 2020

• Company C has aggregate used amounts of £50m
• Company C has non-trading debits of £90m and non-trading credits of £280m and elects to set £200m of non-trading losses against other profits

»Ê¹ÚÌåÓýappre is a ‘used amount ‘in the accounting period ended 31 December 2020 because para 18(a) the £600m exceeds the aggregate of used amounts (£50m) and (b) there are non-trading credits of £280m and non-trading losses of £200m are set off against other profits.

»Ê¹ÚÌåÓýapp ‘remaining carried forward amountâ€� is £550m being the excess at para 18(a). This is greater than the total of para 20(a) non- trading credits â€� £280m and (b) non-trading losses set off against other profits â€� £200m. »Ê¹ÚÌåÓýapprefore the used amount is equal to the total of (a) and (b) = £480m.

Accounting period ended 31 December 2021

• Company C has aggregate used amounts of £530m
• Company C has non-trading debits of £100m and non-trading credits of £80m.

»Ê¹ÚÌåÓýappre is a ‘used amount ‘in the accounting period ended 31 December 2021 because para 18(a) the £600m exceeds the aggregate of used amounts (£530m) and (b) there are non-trading credits of £80m.

»Ê¹ÚÌåÓýapp ‘remaining carried forward amountâ€� is £70m being the excess at para 18(a). This is less than the total of para 20 (a) non-trading credits â€� £80m and (b) non-trading losses set off against other profits â€� £0. »Ê¹ÚÌåÓýapprefore the used amount is the remaining carried-forward debit for the period - £70m (para 20).

»Ê¹ÚÌåÓýapp total of used amounts (£50m+£480m+£70m) now equals the total of non-banking non-trading intangible losses (£600m) so no further add backs are required.